By mutual consent, Calnetics Corp. and Richmond Holdings Inc. abandoned plans to merge Richmond into a new Calnetics subsidiary. The letter of intent, announced April 13, lasted 13 days. ``We're stronger on the balance sheet, and they're stronger in the income statement,'' Calnetics Corp. Chairman Clinton G. Gerlach said in an April 26 telephone interview.
``We put everything on the scale and keep weighing how strong or how weak they are, but it is not appropriate to proceed,'' Gerlach said.
He does not expect talks to resume.
Calnetics' stockholder equity was $6,759,000 as of March 31; privately held Richmond's equity was $3 million as of Feb. 28. Calnetics has nine-month sales of $20.6 million and profit of $629,000. Richmond, the larger firm, reported six-month sales of $13.3 million and profit of $843,000.
``Being a public company, we try to decide at what time to announce'' a pending deal, Gerlach said. ``If we go on too long [in discussions], it leaks out, and some shareholders are disadvantaged.'' The proposed Richmond merger was announced ``at an early date.''
Calnetics' operations include a tubing extruder, injection molder and plastic sheet manufacturer. A Richmond subsidiary makes static-control devices and flexible packaging products.
Richmond Chairman R. Sam Christensen did not return telephone calls.